Staff cuts at two independent film and television companies that had only recently expanded could point toward a new round of belt-tightening among even relatively healthy small and medium producers.
New World Entertainment Ltd., one of Hollywood's largest producers outside the major studios, said it is implementing cuts that could eliminate at least 5% of its approximately 850 employees.
Separately, officers of Imagine Films Entertainment--a much smaller production company formed 16 months ago--said they are planning to close their New York office by Jan. 1, thus eliminating about five of the company's approximately 20 employees.
The staff cuts don't mean that either company has scaled back its future production plans. New World still has about $150 million in available production funds from previous public bond offerings, and much smaller Imagine still has most of the approximately $13 million it raised by going public in 1986. New World expects to release about 25 films next year. Imagine expects to release four or five films annually.
Both New World and Imagine initially sold stock to the public within the last two years. Neither producer appears to be in any financial trouble.
But officers of both companies said they were trimming overhead at least partly in response to depressed earnings or a belief that the stock market's sharp decline would make it hard to find new outside financing in the immediate future.
"We have to watch our overhead, and pull in a little tight, because it may be a little while before little companies like ours can comfortably go out there and attract new money," Ron Howard, co-chief executive officer of Imagine said in a recent interview.
Brian Grazer, the company's other co-chief executive officer, said Imagine initially planned to close its New York office six or eight months ago--and well before the market crash--because "we found that it wasn't really functional with a company our size."
According to Grazer, chief operating officer Neil Braun is leaving Imagine "by mutual agreement," largely because he didn't want to leave New York.
Imagine hasn't had earnings yet from its fledgling movie and TV operations. The company has produced the "Ohara" series for ABC and has other TV projects, but has yet to launch its first film.
Of New World's staff reduction, co-chairman Robert Rehme said: "We're downsizing the company. . . . There's just a general belief here that we were getting too fat."
Rehme declined to speak in detail about reductions because they are still under way. But he said he expected tighter operations "across the board," even though the company is continuing to expand feature film production. To what extent TV operations are affected will depend on how New World's shows and pilots fare with the network in the coming season, Rehme said. The company produces "Crime Story," "Tour of Duty" and "Sledge Hammer!," among other shows.
New World recently reported losses for its second and third quarters. "When you lose for a quarter, it does help to open your eyes," said Rehme, although he insisted that the cuts weren't a direct result of the losses.
A spokesman for Columbia Pictures didn't return a call seeking comment on recent trade paper reports that the major studio would undergo large staff reductions in connection with its pending merger with Tri-Star Pictures.